America Online Increases Monthly Price for Unlimited Internet Use

Strategic Insights -

America Online Inc. has announced that it will increase the monthly price for unlimited use of AOL and the Internet by $2 to $21.95, effective at the start of each member's monthly billing cycle in April. The price increase will fund continued improvement of its members' online experience and keep pace with the cost of members' increased usage. According to Steve Case, chairman and chief executive officer of America Online, the expanding membership and surging usage confirm that consumers want the content, services, and ease of use that are uniquely AOL.

Key Takeaways:

  • The monthly price for unlimited use of AOL and the Internet will increase by $2 to $21.95, effective in April.
  • The price increase will fund continued improvement of the members' online experience and keep pace with the cost of members' increased usage.
  • Since introducing unlimited use pricing, members have tripled their time spent on AOL, spending an average of 23 hours per month online.
  • Web hits by AOL members have quadrupled to 700 million daily, and the number of e-mail messages has more than tripled to 22 million each day.
  • AOL has invested over $700 million in building the world's largest dial-up network and adding 1,000 customer service representatives.
  • The company will continue to offer other pricing plans with no changes, including the "Bring-Your-Own-Access" rate of $9.95 monthly and the "Light Usage" plan of $4.95 monthly for the first three hours of use.
  • AOL operates two worldwide Internet online services: AOL, with over 11 million members, and CompuServe, with over 2 million members.

Statistics:

  • Average monthly usage by AOL members: 23 hours.
  • Increase in Web hits by AOL members: 400% (from 1.7 million to 700 million)
  • Increase in e-mail messages: 300% (from 8 million to 22 million per day)
  • Total investment by AOL in building the world's largest dial-up network: over $700 million.

Sources:

  • America Online Inc., press release (date not specified)
  • Steve Case, chairman and chief executive officer of America Online, interview (date not specified)